Microsoft reveals Xbox One game console

At least eight new exclusive videogame properties on the way

By

DanGallagher

Reuters

Microsoft unveiled the Xbox One at is Redmond, Wash., headquarters on Tuesday.

SAN FRANCISCO (MarketWatch) — Microsoft Corp. unveiled a new videogame console called the Xbox One on Tuesday, though the company took great pains to tout the device as an “ultimate, all-in-one home entertainment system.”

Microsoft
MSFT, -0.74%
lifted the wraps off the device at an event at its Redmond, Wash., headquarters. Relatively few games were shown on Tuesday, as the company promised to share more details about coming releases at the E3 videogame conference taking place in Los Angeles in three weeks.

Microsoft shows off Xbox One

(1:28)

Microsoft unveiled a new videogame console called the Xbox One on Tuesday. The company spent much of the time showcasing the broader entertainment features of the new console while relatively few games were shown. MarketWatch's Dan Gallagher reports.

Don Mattrick, who runs the Xbox business for Microsoft, said the goal of the team was to make a system that was “simple, instant and complete.”

Shares of Microsoft closed trading down about 0.7% to $34.85 on Tuesday. Game publishers Activision Blizzard and Electronic Arts were up 2.6% and nearly 1%, respectively.

“The most important takeaway is that Xbox One offers a complete entertainment experience, with the ability to watch broadcast TV, older programs, movies, play games, surf the web, or have a Skype conversation,” Michael Pachter of Wedbush Securities told MarketWatch.

Yun Kim of Janney Capital agreed, writing to clients that “an integrated entertainment experience across all devices is the next big thing in the consumer market.” He added that success of the Xbox One could also help the company’s main Windows business, which has been struggling with the slump in PC sales.

“If Xbox Live gains traction as an entertainment hub for Xbox One users, we believe this could serve as a catalyst to incremental sales for Windows-based devices, which provide access to all Xbox Live content offerings,” Kim wrote.

The broad entertainment focus disappointed some others at the event. Steve Butts, editor in chief at the IGN gaming magazine, said the event did not compare as well to the unveiling Sony
SNE, -1.14%6758, -0.64%
had for its PlayStation 4 in February. Sony’s U.S.-listed shares closed trading up more than 9% at $22.91.

“Sony really delivered a message that spoke to gamers, that this is a place to play games and for developers, this is what you want to put your games on,” he told MarketWatch. “Microsoft seems to have gone down the road they did with the original Xbox, which is to attempt to replace every other device in the living room. To me as a gamer, that’s not a compelling message.”

Yusuf Mehdi of Microsoft demonstrates TV viewing on the Xbox One.

No launch date or price details were given for the new console, beyond Mattrick saying that the Xbox One will launch “later this year.” Both Microsoft and Sony are expected to share more details about their launch plans at E3.

Among the new games that were showcased at the event was the coming “Call of Duty: Ghosts” from Activision Blizzard
ATVI, -1.28%
, which will go on sale this fall. Electronic Arts
EA, -1.10%
announced a new game engine for its line of popular sports titles that will be featured on the new Xbox.

Also, Microsoft announced that it has struck a deal to make a TV series out of its blockbuster “Halo” game franchise that will be featured on the new Xbox.

The company said it plans to have about 15 new exclusive game titles ready for the Xbox One in its first year on the market. Eight of those will be brand-new game properties, meaning titles not based on existing game franchises.

“That is a lot,” said Pachter, who added of the console, “if they price it right, this will be a huge success.”

Ben Schachter of Macquarie Securities wrote to clients that “we saw nothing earth-shattering” at the event, but added that pricing will be the most important factor in determining demand for the console in a rapidly shifting gaming market.

“If a low initial-cost subscription model is announced at E3, it would be a meaningful positive in our view,” he wrote. “If not, we may need to wait and see if any key must-have platform-exclusive features or titles appear.”

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